Weekly S&P500 ChartStorm - 3 March 2024

This week: monthly update, seasons and cycles, supply and demand, valuations, analyst extremes, big sectors, market history, conditional seasonality...

Welcome to the latest Weekly S&P500 #ChartStorm!

Learnings and conclusions from this week’s charts:

• The S&P500 closed up 5.2% in Feb (6.8% YTD).

• A positive Jan/Feb is historically a good sign for the year ahead.

• Albeit, election years tend to see a strong Jan/Feb and a weak Mar/Apr.

• SMID caps are cheap, large caps expensive.

• Analysts are very optimistic on long-term earnings growth (which has historically been a contrarian signal).

Overall, after a great start to the year, there is certainly a feel of self-reinforcing bullishness in the market. While you don’t want to get too fixated on seasonality, the playbook for this year of up in Jan/Feb, down in Mar/Apr and then wobbling up to the right for the rest of the year doesn’t seem at all out of place given how sentiment is tracking at the moment and the relatively smooth ride so far.

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1. Happy New Month:  The S&P500 closed up +5.2% in February, placing it up +6.8% YTD (and topping the asset class return tables). The market is comfortably sailing on to new all-time highs in nominal terms (albeit in CPI adjusted terms still about 3% off the all-time high), and comfortably above its 10-month moving average. Not much else to say on this — a picture of strength.

Source: 

Topdown Charts

Topdown Charts Professional

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2. Good Jan Good Feb, Good Year Ahead:  Here’s the seasonal track record for the S&P500 when the market closes up in January and February.